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- Eskom announced its interim results for the six months ending 30 September on Friday.
- In its report, it said unbundling was on track.
- The company also announced the appointment of an acting chief financial officer with immediate effect.
- For more financial news, go to the News24 Business front page.
Eskom, which announced its interim financial results on Friday, says it has made progress with unbundling and expects that a license for its new subsidiary transmission company will be issued by the end of April.
It also hopes that it will have secured lenders' consent for the split by this date in instances where this is necessary.
In the notes to the financial statements, the board says:
The Cabinet also announced progress on Eskom's unbundling this week with the approval of the Electricity Regulation Amendment Bill, which will establish the independent market and system operator and further open up the electricity market to competition.
The interim financial results for the six months ended 30 September 2022 showed a profit of R3.8 billion but the company warned that its performance was "seasonal" as revenue is higher, tariffs rise, and costs from renewable energy are lower, during the winter months. A large loss is expected by the end of March 2023, due to load shedding and diesel costs.
READ | Budget 2023 | Huge bailout for Eskom to come with strings attached
Eskom also noted that when the new financial year begins on 1 April, Eskom would only be permitted to borrow with the written permission of the finance minister, which is one of the conditions of the Treasury's R254 billion debt relief plan. The R350 billion of government guarantees will expire as the debt is paid off.
This means it must fund its capital costs from the revenue it earns from operations. Large capital projects – such as investment in the transmission grid – will need permission.
In its assessment of Eskom's going concern status, the board said that it had considered "the impact of the continuous deteriorating generation plant performance and increased reliance on more expensive sources" including private producers and diesel-powered turbines "to manage supply and demand," it said.
The impact of rising unpaid debts owed to Eskom was also considered, and it was hoped that the Treasury would soon table a solution to deal with defaulting municipalities.
Despite the restrictions on borrowing, the board said that considering the progress of the debt relief package and the support from government, "there is a reasonable expectation that the group has access to adequate resources and facilities to be able to continue its operations and fund the capital programme for the foreseeable future as a going concern."
The company also announced that Martin Buys, general manager of group finance, will act as chief financial officer (CFO) with immediate effect and until further notice.
"Buys is a seasoned executive who started his career in Eskom in 1987. Over the course of his almost forty-year career at Eskom, he has held various roles, predominantly within the field of finance," it said in a statement.
